News

BCC downgrades UK growth forecasts

The British Chambers of Commerce (BCC) has downgraded its UK GDP growth forecast from 2.6% to 2.4% in 2015; from 2.7% to 2.5% in 2016 and from 2.7% to 2.5% in 2017.

Weaker than expected net trade and manufacturing figures were the main reasons for the downgrades. However, the BCC believes the UK economy is set to continue expanding at a moderate pace, mostly driven by strong growth in the service sector and in consumer spending.

Key points in the forecast:

The downgrade is mainly due to weaker than expected trade figures and a worse than predicted manufacturing performance, largely as a result of falling global prospects in recent months

Lower than predicted actual GDP growth in Q3 2015 and downward ONS revisions of earlier estimates also contributed to the BCC’s downgrade

Quarterly UK GDP growth is expected to average just over 0.6% per quarter from Q4 2015 onwards, in line with the economy’s long-term growth trend

The service sector is forecast to grow by 2.7% in 2015; 2.9% in 2016 and 2.9% in 2017 (revised slightly from 2.8% in 2015, 2.9% in 2016 and 2.9% in 2017 in the previous forecast)

The manufacturing sector is expected to contract by 0.2% in 2015, followed by growth of 0.7% in 2016 and 2.0% in 2017